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«California Employment Law Notes Employees Had Reasonable Expectation Of Privacy But Failed To SEPTEMBER Prove Employer Violated Their Rights ...»

California Employment

Law Notes

Employees Had Reasonable Expectation Of Privacy But Failed To

SEPTEMBER

Prove Employer Violated Their Rights

Hernandez v. Hillsides, Inc., 47 Cal. 4th 272 (2009)

Vol. 8, No. 5

Plaintiffs Abigail Hernandez and Maria-Jose Lopez were employed by Hillsides Children

Center, a private nonprofit residential facility for neglected and abused children, including

by Anthony J. Oncidi

victims of sexual abuse. They shared an enclosed office where they performed clerical work during daytime business hours. The director of the facility discovered that late at night (after Hernandez and Lopez had left for the day) an unknown person had repeatedly used a Mr. Oncidi is a partner in and computer in the shared office to access the Internet and view pornographic websites.

the Chair of the Labor and Concerned that the culprit might be a staff member who worked with the children, the Employment Department of director installed a hidden camera in the office without notifying Hernandez and Lopez.

Proskauer Rose LLP in Since neither Hernandez nor Lopez was suspected of any wrongdoing, the camera was never Los Angeles, where he operated during business hours and the women were not monitored by the surveillance exclusively represents system. After discovering the hidden camera, the women filed this action, asserting a employers and management violation of their right to privacy. The trial court granted defendants’ summary judgment in all areas of employment motion, but the court of appeal reversed, holding there were triable issues that plaintiffs had and labor law. His telephone suffered an intrusion into a protected zone of privacy that was so unjustified and offensive number is 310.284.5690 and as to constitute a privacy violation. The Supreme Court reversed the court of appeal and his e-mail address is reinstated summary judgment for defendants, holding that although there may have been an aoncidi@proskauer.com intrusion into the zone of privacy, there was no triable issue because the intrusion was not “highly offensive and sufficiently serious to constitute a privacy violation.” Among other things, the Supreme

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2 P RO S K AUER ROSE LLP

Court Properly Rejected Reliance Upon Employer’s Uniform Policy To Certify Class Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (9th Cir. 2009) Raymond Vinole and Ken Yoder filed this class action, alleging that the proposed class of current and former Countrywide External Home Loan Consultants was misclassified as exempt outside sales employees and that they were impermissibly denied overtime and other wages. Before plaintiffs filed their motion for class certification and prior to the pretrial motion deadline and discovery cutoff, Countrywide filed a motion to deny class certification, which the district court granted. Concluding that plaintiffs had “ample time” to prepare and present their certification argument, the Ninth Circuit found “no rule or decisional authority prohibit[ing] Countrywide from filing its motion to deny certification before plaintiffs filed their motion to certify.” The Court further held the district court did not abuse its discretion under FRCP 23(b)(3) because the record supported its conclusion that individual issues predominated over common issues. In particular, the Court held that a “district court abuses its discretion in relying on an internal uniform exemption policy to the near exclusion of other factors relevant to the predominance inquiry.” In so holding, the Ninth Circuit refused to follow Wang v. Chinese Daily News, Inc., 231 F.R.D. 602 (C.D. Cal. 2005). Accord In re Wells Fargo Home Mortgage, 571 F.3d 953 (9th Cir. 2009). See also Ali v. U.S.A. Cab Ltd., 2009 WL 2197069 (Cal. Ct. App. 2009) (trial court did not abuse its discretion in denying class certification in case against taxi cab company that classified its drivers as independent contractors rather than employees).

Order Approving Wage & Hour Class Action Settlement Is Vacated Clark v. American Residential Servs., 175 Cal. App. 4th 785 (2009) Derain Clark and Maxine Gaines filed a class action lawsuit against American Residential Services, seeking unpaid minimum and overtime wages, payment for missed meal and rest periods and other violations. Eighteen months after the lawsuit was filed, the parties engaged in a one-day mediation with a respected mediator and agreed to settle the matter for $2 million, out of which Clark and Gaines would receive $25,000 each. The other class members would receive an average of $561.44. Notice of the proposed settlement elicited objections from 20 putative class members who alleged the settlement resulted in their recovering only about one percent of the total value of their claims and that no evidence was presented to the court to justify the settlement. After a hearing, the trial court approved the settlement, and the objectors filed this appeal. The Court of Appeal vacated the settlement because the trial court lacked sufficient information to make an informed evaluation of the fairness of the settlement – among other things, the objectors asserted that class counsel’s evaluation of the case was based on a “staggering mistake of law,” concerning which the trial court apparently made no independent assessment. The appellate court also concluded it was an abuse of discretion to permit incentive or enhancement awards of $25,000 each to Clark and Gaines (more than 44 times the average payout to other class members) as well as costs totaling more than $44,500 when the notice to class members stated that plaintiffs’ counsel were requesting reimbursement “of costs up to $40,000.”

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4 P RO S K AUER ROSE LLP

Employees Of Wal-Mart’s Suppliers Could Not Sue Wal-Mart For Poor Working Conditions Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677 (9th Cir. 2009) Plaintiffs (all foreign employees of Wal-Mart suppliers) filed this class action complaint against Wal-Mart based on the working conditions in their employers’ factories located in China, Bangladesh, Indonesia, Swaziland and Nicaragua. Plaintiffs relied upon a code of conduct that Wal-Mart developed for its suppliers in 1992, entitled “Standards for Suppliers,” which requires foreign suppliers to adhere to local laws and industry standards regarding working conditions such as pay, hours, forced labor, child labor and discrimination. The complaint alleged that Wal-Mart does not monitor its suppliers and that it knows they often violate the Standards adopted by Wal-Mart. Among other things, plaintiffs alleged they are third-party beneficiaries of the Standards, that Wal-Mart is plaintiffs’ joint employer and that Wal-Mart negligently breached its duty to monitor the suppliers and to protect plaintiffs. The district court granted Wal-Mart’s motion to dismiss, holding that Wal-Mart owed no contractual or other duty to plaintiffs; the Ninth Circuit affirmed dismissal of the action. Cf. Bauman v.

DaimlerChrysler Corp., 2009 WL 2634795 (9th Cir. 2009) (claims asserted by Argentinian residents against their former employer (Mercedes Benz Argentina) under the Alien Tort Claims Act were properly dismissed for lack of personal jurisdiction).

County May Have Breached Confidentiality Agreement With Former Employee Sanchez v. County of San Bernardino, 176 Cal. App. 4th 516 (2009) Elizabeth Sanchez was a high-ranking county employee (the chief labor negotiator for the county) who was widely regarded as a “rising superstar” before she became involved in a “physical romantic relationship” with James Erwin, the president of the labor union that represented the county’s sheriff’s deputies. When Sanchez’s supervisor discovered the relationship, he insisted that she resign. Thereafter, Sanchez and the county entered into a written severance agreement, which included a confidentiality provision, stating that the “facts, events and issues which gave rise to this Agreement” would remain confidential. Immediately after she resigned, newspaper articles appeared in which it was reported that Sanchez had resigned due to a conflict of interest arising out of an “improper relationship” with Erwin.

Sanchez filed this lawsuit against the County and others, alleging, among other things, breach of contract, invasion of privacy and intentional infliction of emotional distress. The trial court granted summary adjudication on these claims in favor of the County, but the Court of Appeal reversed, rejecting the County’s arguments that the confidentiality provision was “contrary to public policy,” that its disclosures about Sanchez were privileged pursuant to Civil Code § 47(a) and that Sanchez herself had waived the confidentiality provision by disclosing information about her resignation to various third parties.

Anti-SLAPP Motion Was Properly Granted In Trade Secrets Litigation Raining Data Corp. v. Barrenechea, 175 Cal. App. 4th 1363 (2009) Raining Data sued two of its former employees and their new employer for misappropriation of trade secrets. Defendants then filed a cross-complaint against Raining Data and its CEO – to which Raining Data responded by filing a motion to strike all cross-claims pursuant to Code of Civil Procedure § 425.16 (the anti-SLAPP statute). The trial court granted the antiSLAPP motion and struck the entirety of the cross-complaint and also awarded Raining Data

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6 P RO S K AUER ROSE LLP

back injury with sciatica, and brain damage due to lead poisoning. She alleged discrimination based on her race, gender, sexual orientation and her various disabilities as well as retaliation for participating in the discrimination complaint process. Among other things, Kraus complained that she was denied access to the Presidio Trust’s vanpool, that her supervisor unfairly evaluated her and that she was falsely accused of sexually harassing a female co-employee. The district court dismissed several of Kraus’s claims on summary judgment because she had failed to make a prima facie showing of discrimination and dismissed others because Kraus had not adequately exhausted her administrative remedies.

The Ninth Circuit reviewed the dismissal for failure to exhaust administrative remedies and reversed the summary judgment, holding that a federal employee seeking to proceed under Title VII need not contact an EEO “counselor” to exhaust administrative remedies; the fact that Kraus had contacted the EEO “officer” sufficed.

Messengers Were Properly Characterized As Employees For Purposes Of Unemployment Insurance Messenger Courier Ass’n of the Americas v. CUIAB, 175 Cal. App. 4th 1074 (2009) Two trade associations, the Messenger Courier Association and the California Delivery Association, sought declaratory relief invalidating a precedential decision by the California Unemployment Insurance Appeals Board (the “CUIAB”) assessing unemployment insurance contributions and penalties against a courier service that had erroneously characterized its messengers as independent contractors rather than employees. Plaintiffs argued the CUIAB erroneously relied upon California Supreme Court authority in S.G.

Borello & Sons, Inc. v. Department of Indus. Relations, 48 Cal. 3d 341 (1989), a case involving employee status under the Workers’ Compensation Act, which they claimed is inapplicable in the unemployment insurance context. The trial court and the Court of Appeal disagreed, holding the CUIAB had not erred in its application of the law. Compare Cortez v. Abich, 2009 WL 2767738 (Cal. Ct. App. 2009) (homeowners who hired unlicensed contractor to remodel their home were not employers for purposes of OSHA or workers’ compensation law).

Newly Enacted California StatutesNoose Hanging = Hate Crime

Any person who hangs a noose, knowing it to be a symbol representing a threat to life and for the purpose of terrorizing another, on the property of another or on the property of a school, park or place of employment shall be punished by imprisonment in the county jail and/or fined up to $5,000 ($15,000 for subsequent convictions). (A.B. 412).

Sports Betting Pools

Participation in a bet, wager or betting pool with another person or group of persons who are not acting for gain, hire or reward other than that which is at stake for every participant based on the result of a contest or event, including a sporting event, shall no longer be a misdemeanor nor a felony, but shall only be an infraction punishable by a fine not to exceed $250. Caveat: This exception would not apply to bets, wagers or pools made online or to betting pools with more than $2,500 at stake. And just in time for football season...

(A.B. 58).

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California Employment Law Notes Proskauer’s nearly 200 Labor and Employment lawyers can address the most complex and challenging labor and employment law issues faced by employers.

The following Los Angeles attorneys welcome any questions you might have.

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If you would like to subscribe to California Employment Law Notes, please send an email to Proskauer_Newsletters@proskauer.com. We also invite you to visit our website www.proskauer.com to view all available Proskauer publications.

This publication is a service to our clients and friends. It is designed only to give general information on the developments actually covered. It is not intended to be a comprehensive summary of recent developments in the law, treat exhaustively the subjects covered, provide legal advice or render a legal opinion.

GreenSpacesTM is our Firm-wide initiative to create a culture of environmental awareness, responsibility and social consciousness that supports a productive and sustainable workplace.

BOCA RATON | BOSTON | CHICAGO | HONG KONG | LONDON | LOS ANGELES | NEWARK | NEW ORLEANS | NEW YORK | PARIS | SÃO PAULO | WASHINGTON, D.C.

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